Community mediation in economic crisis (Ineffective and effective sustainability measures)

from the article by Wendy E. Hollingshead Corbett and Justin R Corbett in Nevada Law Journal:

Most Frequently Reported Ineffective Sustainability Measures

Increased or improved fundraising activities. The rationale as to why this internal strategy was not effective was very simple for most respondents—in times of economic crisis most corners of society are negatively affected, including centers’ traditional funding sources. This particular economic crisis seemed even to affect some centers’ most reliable sources of foundational, institutional, and appropriated funding. One research participant succinctly stated: “Grant exploration has resulted zero benefits,” while another reported: “additional development work has only wasted valuable time with little reward for our efforts.”

Increased marketing. This internal method seemed to lack efficacy primarily because community mediation centers reported the expenditure ofresources for marketing outpaced their benefit. As one participant commented, “the marketing project we undertook is dragging on and taking time and not producing.” In heartier economic times, such marketing would be an appropriate investment to achieve broader goals of public awareness and branding. Given the current razor thin margins at many centers, however, this investment appeared to net too few benefits in the near-term to justify the resource expenditures.

Increased professional development. This internal method was not effective for respondents because the amount of time and resources organizations can allocate toward staff training and development is often too little to result in significant, immediate organizational impact. Costly attendance at annual conferences—one example of professional development whisking leadership far from their center’s operations—tend to be replete with conceptual challenges, professional networking, and strategic considerations. These events, however, may produce little in terms of expedient operational efficiencies or enhancements to the financial bottom-line. As one leader commented: “the amount we budget for [professional development] is too small to be a significant impact engine.”

Developing new programming. This internal method was commonly cited as one of the least effective, yet most used techniques. Its lack of effectiveness seemed to hinge on the fact that developing new programs when existing programs are in resource turmoil further divides staff’s attention, making attainment of any program’s specific goals increasingly difficult. One community mediation leader summarized: “It’s hard to build a new program with staff that is stretched so thin anyway because of increased case loads.”

Cutting programming. Many organizations resorted to the internal strategy of closing certain program offerings, only to find that their customers and clientele suffered at unanticipated levels. “We thought that streamlining our services by cutting back on programming would free up our resources for focus on our main projects, but we lost a higher than anticipated amount of our service population as a result of the cuts,” said one participant. Such unanticipated losses can result from the hasty decision-making thrust upon center leaders by mounting financial pressures.

It should be noted, however, such experiences with programmatic pruning should not dissuade center leadership from carefully examining their portfolios in search for outdated operations, programmatic cash cows, or dusty jewels long since utilized by the community. This evaluation, done with eyes toward organizational strategic objectives and stakeholder impact should help minimize unanticipated negative consequences. By identifying such programmatic and operational inefficiencies or deadweight, centers can help free up much-needed resources to reinvest in comparatively fecund programs or, for some centers, help meet next month’s expenditures.

Most Frequently Reported Effective Sustainability Measures

Increased or improved fundraising activities. It is immediately noteworthy that this strategy was identified by research participants as simultaneously the overall least effective and most effective sustainability technique. To explore this phenomenon further, data is carefully reviewed to establish the characteristics of those organizations that reported both success and failure with the “fundraising” technique. Unsurprisingly, those organizations that reported high success with fundraising were almost entirely those that operated with an annual budget larger than $500,000, had a well-established history within their communities, and had staffs larger than six full-time employees. When looking at the commentary provided by centers that found fundraising efforts to be less effective, their lack of assets, such as time and personnel, appeared to be the main cause of their negative experiences with this technique. The case could be made that larger organizations, which likely already experience a relative economic advantage in comparison with their smaller center brethren, found it easier to allocate existing resources toward the pursuit of additional grants, philanthropic donations, and sponsorships, thereby making their activities comparatively more rewarding.

Combining operations with another organization. This external strategy focuses primarily on building organizational strength through resource sharing. Comments from respondents reflect the popularity of this choice, particularly among smaller nonprofits with annual budgets of less than $100,000. One participant raved: “combining payroll and other services with another nonprofit has saved significant funds!” Another respondent was pleased to report: “combined advocacy across the state has helped keep funding cuts to a minimum.” These realizations in economies of scale help discount the amount of resources necessary to achieve the same outcome.

Careful financial controls and budget allocations. When faced with budget cuts, many respondents found careful examination of this internal strategy yielded opportunities for both creativity and measured, strategic risk taking. For example, one center leader reported: “In 2009, we managed to work within budget through cuts; in 2010, the Board and staff jointly made the decision to intentionally operate a deficit budget for the year.” Another touted the creativity of cutting corners: “I have been extremely careful with budget items and am saving money at all possible avenues . . . i.e. store brand foods for our classes rather than name brands.” Holding fast to a precariously balanced budget, nimbly adjusting to changing realities, or strategically deciding to draw down reserves—as luxurious as such decisions may appear for many centers—all require fiscal constraint, responsiveness, and responsibility; characteristics routinely displayed by dedicated center leadership.

Social entrepreneurial ventures. This external technique proved to be very successful, particularly for the larger nonprofits operating annual budgets larger than $500,000. As one participant reported: “Our social venture has provided unrestricted financial revenue for our agency, while offering a job-training program for our agency’s targeted population.” There were mixed reviews, however, as to the long-term benefits of social ventures. One center quipped: “Too much valuable time has been wasted ‘getting the new people up to speed’ and some people never seem to catch on.” Several participating center leaders were quick to add that social entrepreneurial ventures were not ideal and were being utilized only temporarily until more stable sources of income could be put into place.

Increased board and volunteer involvement. This internal strategy had mixed reviews. Some believed more board involvement put “too many hands in the pot,” or fostered “more voices with less action.” The majority of organizations, however, reported reaping the benefits of adopting working boards and increasing their use of volunteers. One participant commented that his board “really stepped up and was instrumental [in] decision making and crisis management.” Another touted the oft-promoted benefits of recruiting graduate student volunteers, noting the relationship was “mutually beneficial—we got skilled volunteers and they got work experience.”